In a world that is constantly moving and more connected today than ever before, the opportunity to start a business is huge. Starting a business goes beyond just creating a social media presence and picking out what you will sell one key element is, starting a business checklist.
While the pros of owning your own business are motivating – being your own boss, flexibility, and pursuing your passion are all noble, the cons can be daunting – pressure of funding, taxes, and the hoops to jump through. This isn’t to dissuade anyone from launching their dream business, but to provide practical advice to make sure your business is in the 80% that survives the first year.
Here are some tips on how you can succeed by starting a business checklist.
- RESEARCH THE INDUSTRY: Learn who your competitors are, where they are, and what they are charging. You want to make sure there is a demand for you product or service, otherwise you need to make sure you are marketing WHY people need it now.
Other items to look into would be economic indicators, location, and market saturation. None of these should deter you from launching, but you want to make sure your product/service is providing a value that isn’t in the current market place.
- CREATE A BUSINESS PLAN: This is a step that many entrepreneurs fail to take the time to do. Instead, they jump right in with little to no planning, with a “take it as we go” attitude. Business plans rarely get the time they need as they are not the shiny object entrepreneurs see.
A business plan provides a road map to how your business will succeed. It doesn’t need to be pages upon pages, but it should provide a contingency plan for obstacles that will show up. At a minimum, your business plan should include a description of your business, competitive market analysis, strategy & implementation, key financial information, and executive summary of you and your team.
If you want to have lending possibilities, lenders will want to see a thought out and concise business plan. This includes financial projections of what you are expecting to achieve in the future years.
- SET UP YOUR ENTITY STRUCTURE: Whether you are a one person show or plan on having employees, setting up your entity correctly from the start is imperative. This goes beyond just what is easiest, but what will support your company. Not only will the entity structure affect your finances, personal liability and taxes, it can also affect the name of your company.
If you have a business partner, this is even more important. There will be legal documents, appropriate funding, and decisions to be made BEFORE you are too far in.
With the entity structure and liability, I highly advise hiring a CPA and an attorney to make sure that you have the I’s dotted and the t’s crossed. It costs much more for the professional to fix a situation then it does to engage them in the start up.
- REGISTER YOUR BUSINESS: One of the first things you will want to do is see if the business name you want is available. This includes checking with your state of business, making sure it doesn’t infringe on another trademark/brand, and that a website domain is available as well. Start with your state first and then search bigger. There’s nothing worse than doing leg work to build a site or brand, to find out later you didn’t secure the name legally with the state.
Along with registering with the state, you will also need to apply for and EIN with the IRS and a state id number with the state’s revenue department. There may be other id’s you need to sign up for as well, including withholding, permits, licenses, workers compensation, or a sellers permit.
You will also need an EIN to set up a business bank account.
- SECURE FUNDING: A key to keeping a business afloat is funding. While 39% of business owners use their own cash to start their company, there are other ways as well to ensure you have the starting capital needed to get through the lean months.
Other ways to secure funding include bank loans (including line of credit), borrowing against your retirement, other investors, or borrowing from friends/family. Each of these come with their own baggage and potential tax and legal implications.
With the right foundation in place, your business is ready to open. One of the biggest things that are not mentioned above is your attitude and perseverance. When the business is struggling, and it will, you need to have the mindset to see beyond the obstacles of today. Forward, proactive planning will keep the company moving through the struggles. Being open to evolve and pivot is what helped businesses survive recessions, COVID, and political changes. For more information or if you would like some help with starting your business checklist click here to contact me.